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Technological Innovations, Capital Mobility, and the Product Cycle inNorth-South Trade

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Dollar, David

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Abstract

This paper constructs a general equilibrium model of North-South tradein which the North continually introduces new goods. The rate at whichtechnology diffuses to the South is a function of differences in the cost of production in the two regions. The key result of the model is that labor force growth in the South initially increases real wages inthe North (a standard result in classical trade models), but in the long run reduces Northern wages by accelerating the transfer of technology and drawing capital out of the North as well. Copyright 1986 by American Economic Association.

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Publisher Info
Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 76 (1986)
Issue (Month): 1 (March)
Pages: 177-90
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Handle: RePEc:aea:aecrev:v:76:y:1986:i:1:p:177-90

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  1. Ugo Fratesi, 2003. "Innovation Diffusion and the Evolution of Regional Disparities," ERSA conference papers ersa03p327, European Regional Science Association. [Downloadable!]
    Other versions:
  2. Edwin Lai, 2008. "The international product cycle and globalization of production," Staff Papers, Federal Reserve Bank of Dallas, issue May. [Downloadable!]
  3. Michelle P. Connolly & Diego Valderrama, 2005. "North-South technological diffusion and dynamic gains from trade," Working Papers in Applied Economic Theory 2004-24, Federal Reserve Bank of San Francisco. [Downloadable!]
  4. Gene M. Grossman & Elhanan Helpman, 1990. "Product Development and International Trade," NBER Working Papers 2540, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Debasis Mondal & Manash Gupta, 2006. "Product development, imitation and economic growth: A note," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 15(1), pages 27-48, March. [Downloadable!] (restricted)
  6. Stefan Lachenmaier & Ludger Woessmann, 2004. "Does Innovation Cause Exports? Evidence from Exogenous Innovation Impulses and Obstacles," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  7. Alison Butler, 1990. "Endogenous innovation in a north-north model of the product cycle," Working Papers 1990-007, Federal Reserve Bank of St. Louis. [Downloadable!]
  8. Goldsmith, Peter & Ramos, Gabriel & Steiger, Carlos, 2001. "Intellectual Property Protection And The International Marketing Of Agricultural Biotechnology: Firm And Host Country Impacts," 2001 Annual meeting, August 5-8, Chicago, IL 20672, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  9. Gene M. Grossman & Elhanan Helpman, 1989. "Quality Ladders and Product Cycles," NBER Working Papers 3201, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  10. Prashanth Mahagaonkar & Rainer Schweickert & Aditya S. Chavali, 2009. "Sectoral R&D Intensity and Exchange Rate Volatility: A Panel Study for OECD Countries," Kiel Working Papers 1531, Kiel Institute for the World Economy. [Downloadable!]
  11. Gene M. Grossman & Elhanan Helpman, 1989. "Endogenous Product Cycles," NBER Working Papers 2913, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  12. Andre Varella Mollick & Joao Ricardo Faria & Pedro H. Albuquerque & Miguel A. Leon-Ledesma, 2005. "Can Globalisation Stop the Decline in Commodities' Terms of Trade? The Prebisch-Singer Hypothesis Revisited"," Studies in Economics 0510, Department of Economics, University of Kent. [Downloadable!]
  13. David Dollar, 1984. "Commercial Policy and the Product Cycle: The Effect of Import Quotas on LDC Manufacturers in the Short Run and in the Long Run," UCLA Economics Working Papers 349, UCLA Department of Economics. [Downloadable!]
  14. Michelle P. Connolly, 1997. "Technological diffusion through trade and imitation," Staff Reports 20, Federal Reserve Bank of New York. [Downloadable!]
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